These are four consolidated cases questioning the

constitutionality of the Comprehensive Agrarian Reform

Act (R.A. No. 6657 and related laws i.e., Agrarian Land
Reform Code or R.A. No. 3844).
Brief background: Article XIII of the Constitution mandates
that the State shall, by law, undertake an agrarian reform
program founded on the right of farmers and regular
farmworkers, who are landless, to own directly or
collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof.
RA 3844 was enacted in 1963. P.D. No. 27 was
promulgated in 1972 to provide for the compulsory
acquisition of private lands for distribution among tenant-
farmers and to specify maximum retention limits for
landowners. In 1987, President Corazon Aquino issued
E.O. No. 228, declaring full land ownership in favor of the
beneficiaries of PD 27 and providing for the valuation of
still unvalued lands covered by the decree as well as the
manner of their payment. In 1987, P.P. No. 131, instituting
a comprehensive agrarian reform program (CARP) was
enacted; later, E.O. No. 229, providing the mechanics for
its (PP131’s) implementation, was also enacted.
Afterwhich is the enactment of R.A. No. 6657,
Comprehensive Agrarian Reform Law in 1988. This law,
while considerably changing the earlier mentioned
enactments, nevertheless gives them suppletory effect
insofar as they are not inconsistent with its provisions.
[Two of the consolidated cases are discussed below]
G.R. No. 78742: (Association of Small Landowners vs
Secretary)
The Association of Small Landowners in the Philippines,
Inc. sought exception from the land distribution scheme
provided for in R.A. 6657. The Association is comprised of
landowners of ricelands and cornlands whose
landholdings do not exceed 7 hectares. They invoke that
since their landholdings are less than 7 hectares, they
should not be forced to distribute their land to their tenants
under R.A. 6657 for they themselves have shown
willingness to till their own land. In short, they want to be
exempted from agrarian reform program because they
claim to belong to a different class.
G.R. No. 79777: (Manaay vs Juico)
Nicolas Manaay questioned the validity of the agrarian
reform laws (PD 27, EO 228, and 229) on the ground that
these laws valuated their lands for the agrarian reform
program and that the specific amount was determined by
the Department of Agrarian Reform (DAR). Manaay
averred that this violated the principle in eminent domain
which provides that only courts can determine just
compensation.
Manaay also questioned the provision which states that
landowners may be paid for their land in bonds and not
necessarily in cash. Manaay averred that just
compensation has always been in the form of money and
not in bonds.
These violated due process for under the constitution, no
property shall be taken for public use without just
compensation.
Manaay also questioned the provision which
ISSUE:
1. Whether or not there was a violation of the equal
protection clause.
2. Whether or not there is a violation of due process.
3. Whether or not just compensation, under the agrarian
reform program, must be in terms of cash.
HELD:
1. No. The Association had not shown any proof that they
belong to a different class exempt from the agrarian
reform program. Under the law, classification has been
defined as the grouping of persons or things similar to
each other in certain particulars and different from each
other in these same particulars. To be valid, it must
conform to the following requirements:
(1) it must be based on substantial distinctions;
(2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and
(4) it must apply equally to all the members of the class.
Equal protection simply means that all persons or things
similarly situated must be treated alike both as to the
rights conferred and the liabilities imposed. The
Association have not shown that they belong to a different
class and entitled to a different treatment. The argument
that not only landowners but also owners of other
properties must be made to share the burden of
implementing land reform must be rejected. There is a
substantial distinction between these two classes of
owners that is clearly visible except to those who will not
see. There is no need to elaborate on this matter. In any
event, the Congress is allowed a wide leeway in providing
for a valid classification. Its decision is accorded
recognition and respect by the courts of justice except
only where its discretion is abused to the detriment of the
Bill of Rights. In the contrary, it appears that Congress is
right in classifying small landowners as part of the
agrarian reform program.
2. No. It is true that the determination of just compensation
is a power lodged in the courts. However, there is no law
which prohibits administrative bodies like the DAR from
determining just compensation. In fact, just compensation
can be that amount agreed upon by the landowner and
the government – even without judicial intervention so
long as both parties agree. The DAR can determine just
compensation through appraisers and if the landowner
agrees, then judicial intervention is not needed. What is
contemplated by law however is that, the just
compensation determined by an administrative body is
merely preliminary. If the landowner does not agree with
the finding of just compensation by an administrative body,
then it can go to court and the determination of the latter
shall be the final determination. This is even so provided
by RA 6657:
Section 16 (f): Any party who disagrees with the
decision may bring the matter to the court of
proper jurisdiction for final determination of just
compensation.
3. No. Money as [sole] payment for just compensation is
merely a concept in traditional exercise of eminent
domain. The agrarian reform program is a revolutionary
exercise of eminent domain. The program will require
billions of pesos in funds if all compensation have to be
made in cash – if everything is in cash, then the
government will not have sufficient money hence, bonds,
and other securities, i.e., shares of stocks, may be used
for just compensation.
 EN BANC

G.R. No. 78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE

PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B.
ALARCIO, FELIPE A. GUICO, JR., BERNARDO M.
ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T.
GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA,
REYNALDO G. ESTRADA, FELISA C. BAUTISTA,
ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA
J. PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C.
ARRESTO, CONSUELO M. MORALES, BENJAMIN R.
SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S.
FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN
REFORM, respondent.

G.R. No. 79310 July 14, 1989

ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO

FERRARIS, DENNIS JEREZA, HERMINIGILDO
GUSTILO, PAULINO D. TOLENTINO and PLANTERS'
COMMITTEE, INC., Victorias Mill District, Victorias,
Negros Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and
PRESIDENTIAL AGRARIAN REFORM
COUNCIL, respondents.

G.R. No. 79744 July 14, 1989

INOCENTES PABICO, petitioner,

vs.
HON. PHILIP E. JUICO, SECRETARY OF THE
DEPARTMENT OF AGRARIAN REFORM, HON. JOKER
ARROYO, EXECUTIVE SECRETARY OF THE OFFICE
OF THE PRESIDENT, and Messrs. SALVADOR
TALENTO, JAIME ABOGADO, CONRADO AVANCENA
and ROBERTO TAAY, respondents.

G.R. No. 79777 July 14, 1989

NICOLAS S. MANAAY and AGUSTIN HERMANO,

JR., petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian
Reform, and LAND BANK OF THE
PHILIPPINES, respondents.

CRUZ, J.:

In ancient mythology, Antaeus was a terrible giant who

blocked and challenged Hercules for his life on his way to
Mycenae after performing his eleventh labor. The two
wrestled mightily and Hercules flung his adversary to the
ground thinking him dead, but Antaeus rose even stronger
to resume their struggle. This happened several times to
Hercules' increasing amazement. Finally, as they
continued grappling, it dawned on Hercules that Antaeus
was the son of Gaea and could never die as long as any
part of his body was touching his Mother Earth. Thus
forewarned, Hercules then held Antaeus up in the air,
beyond the reach of the sustaining soil, and crushed him
to death.

Mother Earth. The sustaining soil. The giver of life, without

whose invigorating touch even the powerful Antaeus
weakened and died.

The cases before us are not as fanciful as the foregoing

tale. But they also tell of the elemental forces of life and
death, of men and women who, like Antaeus need the
sustaining strength of the precious earth to stay alive.

"Land for the Landless" is a slogan that underscores the

acute imbalance in the distribution of this precious
resource among our people. But it is more than a slogan.
Through the brooding centuries, it has become a battle-cry
dramatizing the increasingly urgent demand of the
dispossessed among us for a plot of earth as their place in
the sun.

Recognizing this need, the Constitution in 1935 mandated

the policy of social justice to "insure the well-being and
economic security of all the people," 1 especially the less
privileged. In 1973, the new Constitution affirmed this goal
adding specifically that "the State shall regulate the
acquisition, ownership, use, enjoyment and disposition of
private property and equitably diffuse property ownership
and profits." 2 Significantly, there was also the specific
injunction to "formulate and implement an agrarian reform
program aimed at emancipating the tenant from the
bondage of the soil." 3

The Constitution of 1987 was not to be outdone. Besides

echoing these sentiments, it also adopted one whole and
separate Article XIII on Social Justice and Human Rights,
containing grandiose but undoubtedly sincere provisions
for the uplift of the common people. These include a call in
the following words for the adoption by the State of an
agrarian reform program:

SEC. 4. The State shall, by law, undertake an agrarian

reform program founded on the right of farmers and
regular farmworkers, who are landless, to own directly or
collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof.
To this end, the State shall encourage and undertake the
just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress
may prescribe, taking into account ecological,
developmental, or equity considerations and subject to the
payment of just compensation. In determining retention
limits, the State shall respect the right of small
landowners. The State shall further provide incentives for
voluntary land-sharing.

Earlier, in fact, R.A. No. 3844, otherwise known as the

Agricultural Land Reform Code, had already been enacted
by the Congress of the Philippines on August 8, 1963, in
line with the above-stated principles. This was
substantially superseded almost a decade later by P.D.
No. 27, which was promulgated on October 21, 1972,
along with martial law, to provide for the compulsory
acquisition of private lands for distribution among tenant-
farmers and to specify maximum retention limits for
landowners.

The people power revolution of 1986 did not change and

indeed even energized the thrust for agrarian reform.
Thus, on July 17, 1987, President Corazon C. Aquino
issued E.O. No. 228, declaring full land ownership in favor
of the beneficiaries of P.D. No. 27 and providing for the
valuation of still unvalued lands covered by the decree as
well as the manner of their payment. This was followed on
July 22, 1987 by Presidential Proclamation No. 131,
instituting a comprehensive agrarian reform program
(CARP), and E.O. No. 229, providing the mechanics for its
implementation.

Subsequently, with its formal organization, the revived

Congress of the Philippines took over legislative power
from the President and started its own deliberations,
including extensive public hearings, on the improvement
of the interests of farmers. The result, after almost a year
of spirited debate, was the enactment of R.A. No. 6657,
otherwise known as the Comprehensive Agrarian Reform
Law of 1988, which President Aquino signed on June 10,
1988. This law, while considerably changing the earlier
mentioned enactments, nevertheless gives them
suppletory effect insofar as they are not inconsistent with
its provisions. 4

The above-captioned cases have been consolidated

because they involve common legal questions, including
serious challenges to the constitutionality of the several
measures mentioned above. They will be the subject of
one common discussion and resolution, The different
antecedents of each case will require separate treatment,
however, and will first be explained hereunder.

G.R. No. 79777

Squarely raised in this petition is the constitutionality of

P.D. No. 27, E.O. Nos. 228 and 229, and R.A. No. 6657.

The subjects of this petition are a 9-hectare riceland

worked by four tenants and owned by petitioner Nicolas
Manaay and his wife and a 5-hectare riceland worked by
four tenants and owned by petitioner Augustin Hermano,
Jr. The tenants were declared full owners of these lands
by E.O. No. 228 as qualified farmers under P.D. No. 27.

The petitioners are questioning P.D. No. 27 and E.O. Nos.

228 and 229 on grounds inter alia of separation of powers,
due process, equal protection and the constitutional
limitation that no private property shall be taken for public
use without just compensation.

They contend that President Aquino usurped legislative

power when she promulgated E.O. No. 228. The said
measure is invalid also for violation of Article XIII, Section
4, of the Constitution, for failure to provide for retention
limits for small landowners. Moreover, it does not conform
to Article VI, Section 25(4) and the other requisites of a
valid appropriation.
In connection with the determination of just compensation,
the petitioners argue that the same may be made only by
a court of justice and not by the President of the
Philippines. They invoke the recent cases of EPZA v.
Dulay 5 andManotok v. National Food
6
Authority. Moreover, the just compensation contemplated
by the Bill of Rights is payable in money or in cash and not
in the form of bonds or other things of value.

In considering the rentals as advance payment on the

land, the executive order also deprives the petitioners of
their property rights as protected by due process. The
equal protection clause is also violated because the order
places the burden of solving the agrarian problems on the
owners only of agricultural lands. No similar obligation is
imposed on the owners of other properties.

The petitioners also maintain that in declaring the

beneficiaries under P.D. No. 27 to be the owners of the
lands occupied by them, E.O. No. 228 ignored judicial
prerogatives and so violated due process. Worse, the
measure would not solve the agrarian problem because
even the small farmers are deprived of their lands and the
retention rights guaranteed by the Constitution.

In his Comment, the Solicitor General stresses that P.D.

No. 27 has already been upheld in the earlier cases
ofChavez v. Zobel, 7 Gonzales v. Estrella, 8 and
Association of Rice and Corn Producers of the
Philippines, Inc. v. The National Land Reform
Council. 9 The determination of just compensation by the
executive authorities conformably to the formula
prescribed under the questioned order is at best initial or
preliminary only. It does not foreclose judicial intervention
whenever sought or warranted. At any rate, the challenge
to the order is premature because no valuation of their
property has as yet been made by the Department of
Agrarian Reform. The petitioners are also not proper
parties because the lands owned by them do not exceed
the maximum retention limit of 7 hectares.

Replying, the petitioners insist they are proper parties

because P.D. No. 27 does not provide for retention limits
on tenanted lands and that in any event their petition is a
class suit brought in behalf of landowners with
landholdings below 24 hectares. They maintain that the
determination of just compensation by the administrative
authorities is a final ascertainment. As for the cases
invoked by the public respondent, the constitutionality of
P.D. No. 27 was merely assumed in Chavez, while what
was decided in Gonzales was the validity of the imposition
of martial law.

In the amended petition dated November 22, 1588, it is

contended that P.D. No. 27, E.O. Nos. 228 and 229
(except Sections 20 and 21) have been impliedly repealed
by R.A. No. 6657. Nevertheless, this statute should itself
also be declared unconstitutional because it suffers from
substantially the same infirmities as the earlier measures.

A petition for intervention was filed with leave of court on

June 1, 1988 by Vicente Cruz, owner of a 1. 83- hectare
land, who complained that the DAR was insisting on the
implementation of P.D. No. 27 and E.O. No. 228 despite a
compromise agreement he had reached with his tenant on
the payment of rentals. In a subsequent motion dated April
10, 1989, he adopted the allegations in the basic
amended petition that the above- mentioned enactments
have been impliedly repealed by R.A. No. 6657.

G.R. No. 79310

The petitioners herein are landowners and sugar planters

in the Victorias Mill District, Victorias, Negros Occidental.
Co-petitioner Planters' Committee, Inc. is an organization
composed of 1,400 planter-members. This petition seeks
to prohibit the implementation of Proc. No. 131 and E.O.
No. 229.

The petitioners claim that the power to provide for a

Comprehensive Agrarian Reform Program as decreed by
the Constitution belongs to Congress and not the
President. Although they agree that the President could
exercise legislative power until the Congress was
convened, she could do so only to enact emergency
measures during the transition period. At that, even
assuming that the interim legislative power of the
President was properly exercised, Proc. No. 131 and E.O.
No. 229 would still have to be annulled for violating the
constitutional provisions on just compensation, due
process, and equal protection.

They also argue that under Section 2 of Proc. No. 131

which provides:

Agrarian Reform Fund.-There is hereby created a special

fund, to be known as the Agrarian Reform Fund, an initial
amount of FIFTY BILLION PESOS (P50,000,000,000.00)
to cover the estimated cost of the Comprehensive
Agrarian Reform Program from 1987 to 1992 which shall
be sourced from the receipts of the sale of the assets of
the Asset Privatization Trust and Receipts of sale of ill-
gotten wealth received through the Presidential
Commission on Good Government and such other
sources as government may deem appropriate. The
amounts collected and accruing to this special fund shall
be considered automatically appropriated for the purpose
authorized in this Proclamation the amount appropriated is
in futuro, not in esse. The money needed to cover the cost
of the contemplated expropriation has yet to be raised and
cannot be appropriated at this time.

Furthermore, they contend that taking must be

simultaneous with payment of just compensation as it is
traditionally understood, i.e., with money and in full, but no
such payment is contemplated in Section 5 of the E.O. No.
229. On the contrary, Section 6, thereof provides that the
Land Bank of the Philippines "shall compensate the
landowner in an amount to be established by the
government, which shall be based on the owner's
declaration of current fair market value as provided in
Section 4 hereof, but subject to certain controls to be
defined and promulgated by the Presidential Agrarian
Reform Council." This compensation may not be paid fully
in money but in any of several modes that may consist of
part cash and part bond, with interest, maturing
periodically, or direct payment in cash or bond as may be
mutually agreed upon by the beneficiary and the
landowner or as may be prescribed or approved by the
PARC.

The petitioners also argue that in the issuance of the two

measures, no effort was made to make a careful study of
the sugar planters' situation. There is no tenancy problem
in the sugar areas that can justify the application of the
CARP to them. To the extent that the sugar planters have
been lumped in the same legislation with other farmers,
although they are a separate group with problems
exclusively their own, their right to equal protection has
been violated.

A motion for intervention was filed on August 27,1987 by

the National Federation of Sugarcane Planters (NASP)
which claims a membership of at least 20,000 individual
sugar planters all over the country. On September 10,
1987, another motion for intervention was filed, this time
by Manuel Barcelona, et al., representing coconut and
riceland owners. Both motions were granted by the Court.

NASP alleges that President Aquino had no authority to

fund the Agrarian Reform Program and that, in any event,
the appropriation is invalid because of uncertainty in the
amount appropriated. Section 2 of Proc. No. 131 and
Sections 20 and 21 of E.O. No. 229 provide for an initial
appropriation of fifty billion pesos and thus specifies the
minimum rather than the maximum authorized amount.
This is not allowed. Furthermore, the stated initial amount
has not been certified to by the National Treasurer as
actually available.

Two additional arguments are made by Barcelona, to wit,

the failure to establish by clear and convincing evidence
the necessity for the exercise of the powers of eminent
domain, and the violation of the fundamental right to own
property.

The petitioners also decry the penalty for non-registration

of the lands, which is the expropriation of the said land for
an amount equal to the government assessor's valuation
of the land for tax purposes. On the other hand, if the
landowner declares his own valuation he is unjustly
required to immediately pay the corresponding taxes on
the land, in violation of the uniformity rule.

In his consolidated Comment, the Solicitor General first

invokes the presumption of constitutionality in favor of
Proc. No. 131 and E.O. No. 229. He also justifies the
necessity for the expropriation as explained in the
"whereas" clauses of the Proclamation and submits that,
contrary to the petitioner's contention, a pilot project to
determine the feasibility of CARP and a general survey on
the people's opinion thereon are not indispensable
prerequisites to its promulgation.

On the alleged violation of the equal protection clause, the

sugar planters have failed to show that they belong to a
different class and should be differently treated. The
Comment also suggests the possibility of Congress first
distributing public agricultural lands and scheduling the
expropriation of private agricultural lands later. From this
viewpoint, the petition for prohibition would be premature.

The public respondent also points out that the

constitutional prohibition is against the payment of public
money without the corresponding appropriation. There is
no rule that only money already in existence can be the
subject of an appropriation law. Finally, the earmarking of
fifty billion pesos as Agrarian Reform Fund, although
denominated as an initial amount, is actually the maximum
sum appropriated. The word "initial" simply means that
additional amounts may be appropriated later when
necessary.

On April 11, 1988, Prudencio Serrano, a coconut planter,

filed a petition on his own behalf, assailing the
constitutionality of E.O. No. 229. In addition to the
arguments already raised, Serrano contends that the
measure is unconstitutional because:

(1) Only public lands should be included in the CARP;

(2) E.O. No. 229 embraces more than one subject which is
not expressed in the title;

(3) The power of the President to legislate was terminated

on July 2, 1987; and

(4) The appropriation of a P50 billion special fund from the

National Treasury did not originate from the House of
Representatives.

G.R. No. 79744

The petitioner alleges that the then Secretary of

Department of Agrarian Reform, in violation of due
process and the requirement for just compensation,
placed his landholding under the coverage of Operation
Land Transfer. Certificates of Land Transfer were
subsequently issued to the private respondents, who then
refused payment of lease rentals to him.

On September 3, 1986, the petitioner protested the

erroneous inclusion of his small landholding under
Operation Land transfer and asked for the recall and
cancellation of the Certificates of Land Transfer in the
name of the private respondents. He claims that on
December 24, 1986, his petition was denied without
hearing. On February 17, 1987, he filed a motion for
reconsideration, which had not been acted upon when
E.O. Nos. 228 and 229 were issued. These orders
rendered his motion moot and academic because they
directly effected the transfer of his land to the private
respondents.

The petitioner now argues that:

(1) E.O. Nos. 228 and 229 were invalidly issued by the
President of the Philippines.

(2) The said executive orders are violative of the

constitutional provision that no private property shall be
taken without due process or just compensation.

(3) The petitioner is denied the right of maximum retention

provided for under the 1987 Constitution.

The petitioner contends that the issuance of E.0. Nos. 228

and 229 shortly before Congress convened is anomalous
and arbitrary, besides violating the doctrine of separation
of powers. The legislative power granted to the President
under the Transitory Provisions refers only to emergency
measures that may be promulgated in the proper exercise
of the police power.

The petitioner also invokes his rights not to be deprived of

his property without due process of law and to the
retention of his small parcels of riceholding as guaranteed
under Article XIII, Section 4 of the Constitution. He
likewise argues that, besides denying him just
compensation for his land, the provisions of E.O. No. 228
declaring that:

Lease rentals paid to the landowner by the farmer-

beneficiary after October 21, 1972 shall be considered as
advance payment for the land.

is an unconstitutional taking of a vested property right. It is

also his contention that the inclusion of even small
landowners in the program along with other landowners
with lands consisting of seven hectares or more is
undemocratic.

In his Comment, the Solicitor General submits that the

petition is premature because the motion for
reconsideration filed with the Minister of Agrarian Reform
is still unresolved. As for the validity of the issuance of
E.O. Nos. 228 and 229, he argues that they were enacted
pursuant to Section 6, Article XVIII of the Transitory
Provisions of the 1987 Constitution which reads:

The incumbent president shall continue to exercise

legislative powers until the first Congress is convened.

On the issue of just compensation, his position is that

when P.D. No. 27 was promulgated on October 21. 1972,
the tenant-farmer of agricultural land was deemed the
owner of the land he was tilling. The leasehold rentals paid
after that date should therefore be considered
amortization payments.

In his Reply to the public respondents, the petitioner

maintains that the motion he filed was resolved on
December 14, 1987. An appeal to the Office of the
President would be useless with the promulgation of E.O.
Nos. 228 and 229, which in effect sanctioned the validity
of the public respondent's acts.
G.R. No. 78742

The petitioners in this case invoke the right of retention

granted by P.D. No. 27 to owners of rice and corn lands
not exceeding seven hectares as long as they are
cultivating or intend to cultivate the same. Their respective
lands do not exceed the statutory limit but are occupied by
tenants who are actually cultivating such lands.

According to P.D. No. 316, which was promulgated in

implementation of P.D. No. 27:

No tenant-farmer in agricultural lands primarily devoted to

rice and corn shall be ejected or removed from his
farmholding until such time as the respective rights of the
tenant- farmers and the landowner shall have been
determined in accordance with the rules and regulations
implementing P.D. No. 27.

The petitioners claim they cannot eject their tenants and

so are unable to enjoy their right of retention because the
Department of Agrarian Reform has so far not issued the
implementing rules required under the above-quoted
decree. They therefore ask the Court for a writ of
mandamus to compel the respondent to issue the said
rules.

In his Comment, the public respondent argues that P.D.

No. 27 has been amended by LOI 474 removing any right
of retention from persons who own other agricultural lands
of more than 7 hectares in aggregate area or lands used
for residential, commercial, industrial or other purposes
from which they derive adequate income for their family.
And even assuming that the petitioners do not fall under
its terms, the regulations implementing P.D. No. 27 have
already been issued, to wit, the Memorandum dated July
10, 1975 (Interim Guidelines on Retention by Small
Landowners, with an accompanying Retention Guide
Table), Memorandum Circular No. 11 dated April 21, 1978,
(Implementation Guidelines of LOI No. 474),
Memorandum Circular No. 18-81 dated December
29,1981 (Clarificatory Guidelines on Coverage of P.D. No.
27 and Retention by Small Landowners), and DAR
Administrative Order No. 1, series of 1985 (Providing for a
Cut-off Date for Landowners to Apply for Retention and/or
to Protest the Coverage of their Landholdings under
Operation Land Transfer pursuant to P.D. No. 27). For
failure to file the corresponding applications for retention
under these measures, the petitioners are now barred
from invoking this right.

The public respondent also stresses that the petitioners

have prematurely initiated this case notwithstanding the
pendency of their appeal to the President of the
Philippines. Moreover, the issuance of the implementing
rules, assuming this has not yet been done, involves the
exercise of discretion which cannot be controlled through
the writ of mandamus. This is especially true if this
function is entrusted, as in this case, to a separate
department of the government.

In their Reply, the petitioners insist that the above-cited

measures are not applicable to them because they do not
own more than seven hectares of agricultural land.
Moreover, assuming arguendo that the rules were
intended to cover them also, the said measures are
nevertheless not in force because they have not been
published as required by law and the ruling of this Court
in Tanada v. Tuvera.10 As for LOI 474, the same is
ineffective for the additional reason that a mere letter of
instruction could not have repealed the presidential
decree.

Although holding neither purse nor sword and so regarded

as the weakest of the three departments of the
government, the judiciary is nonetheless vested with the
power to annul the acts of either the legislative or the
executive or of both when not conformable to the
fundamental law. This is the reason for what some
quarters call the doctrine of judicial supremacy. Even so,
this power is not lightly assumed or readily exercised. The
doctrine of separation of powers imposes upon the courts
a proper restraint, born of the nature of their functions and
of their respect for the other departments, in striking down
the acts of the legislative and the executive as
unconstitutional. The policy, indeed, is a blend of courtesy
and caution. To doubt is to sustain. The theory is that
before the act was done or the law was enacted, earnest
studies were made by Congress or the President, or both,
to insure that the Constitution would not be breached.

In addition, the Constitution itself lays down stringent

conditions for a declaration of unconstitutionality, requiring
therefor the concurrence of a majority of the members of
the Supreme Court who took part in the deliberations and
voted on the issue during their session en banc.11 And as
established by judge made doctrine, the Court will assume
jurisdiction over a constitutional question only if it is shown
that the essential requisites of a judicial inquiry into such a
question are first satisfied. Thus, there must be an actual
case or controversy involving a conflict of legal rights
susceptible of judicial determination, the constitutional
question must have been opportunely raised by the proper
party, and the resolution of the question is unavoidably
necessary to the decision of the case itself. 12

With particular regard to the requirement of proper party

as applied in the cases before us, we hold that the same
is satisfied by the petitioners and intervenors because
each of them has sustained or is in danger of sustaining
an immediate injury as a result of the acts or measures
complained of. 13 And even if, strictly speaking, they are
not covered by the definition, it is still within the wide
discretion of the Court to waive the requirement and so
remove the impediment to its addressing and resolving the
serious constitutional questions raised.

In the first Emergency Powers Cases, 14 ordinary citizens

and taxpayers were allowed to question the
constitutionality of several executive orders issued by
President Quirino although they were invoking only an
indirect and general interest shared in common with the
public. The Court dismissed the objection that they were
not proper parties and ruled that "the transcendental
importance to the public of these cases demands that they
be settled promptly and definitely, brushing aside, if we
must, technicalities of procedure." We have since then
applied this exception in many other cases. 15

The other above-mentioned requisites have also been met

in the present petitions.

In must be stressed that despite the inhibitions pressing

upon the Court when confronted with constitutional issues
like the ones now before it, it will not hesitate to declare a
law or act invalid when it is convinced that this must be
done. In arriving at this conclusion, its only criterion will be
the Constitution as God and its conscience give it the light
to probe its meaning and discover its purpose. Personal
motives and political considerations are irrelevancies that
cannot influence its decision. Blandishment is as
ineffectual as intimidation.

For all the awesome power of the Congress and the

Executive, the Court will not hesitate to "make the hammer
fall, and heavily," to use Justice Laurel's pithy language,
where the acts of these departments, or of any public
official, betray the people's will as expressed in the
Constitution.

It need only be added, to borrow again the words of

Justice Laurel, that —
... when the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority over the
other departments; it does not in reality nullify or invalidate
an act of the Legislature, but only asserts the solemn and
sacred obligation assigned to it by the Constitution to
determine conflicting claims of authority under the
Constitution and to establish for the parties in an actual
controversy the rights which that instrument secures and
guarantees to them. This is in truth all that is involved in
what is termed "judicial supremacy" which properly is the
power of judicial review under the Constitution. 16

The cases before us categorically raise constitutional

questions that this Court must categorically resolve. And
so we shall.

II

We proceed first to the examination of the preliminary

issues before resolving the more serious challenges to the
constitutionality of the several measures involved in these
petitions.

The promulgation of P.D. No. 27 by President Marcos in

the exercise of his powers under martial law has already
been sustained in Gonzales v. Estrella and we find no
reason to modify or reverse it on that issue. As for the
power of President Aquino to promulgate Proc. No. 131
and E.O. Nos. 228 and 229, the same was authorized
under Section 6 of the Transitory Provisions of the 1987
Constitution, quoted above.

The said measures were issued by President Aquino

before July 27, 1987, when the Congress of the
Philippines was formally convened and took over
legislative power from her. They are not "midnight"
enactments intended to pre-empt the legislature because
E.O. No. 228 was issued on July 17, 1987, and the other
measures, i.e., Proc. No. 131 and E.O. No. 229, were both
issued on July 22, 1987. Neither is it correct to say that
these measures ceased to be valid when she lost her
legislative power for, like any statute, they continue to be
in force unless modified or repealed by subsequent law or
declared invalid by the courts. A statute does not ipso
facto become inoperative simply because of the
dissolution of the legislature that enacted it. By the same
token, President Aquino's loss of legislative power did not
have the effect of invalidating all the measures enacted by
her when and as long as she possessed it.

Significantly, the Congress she is alleged to have undercut

has not rejected but in fact substantially affirmed the
challenged measures and has specifically provided that
they shall be suppletory to R.A. No. 6657 whenever not
inconsistent with its provisions. 17 Indeed, some portions of
the said measures, like the creation of the P50 billion fund
in Section 2 of Proc. No. 131, and Sections 20 and 21 of
E.O. No. 229, have been incorporated by reference in the
CARP Law. 18

That fund, as earlier noted, is itself being questioned on

the ground that it does not conform to the requirements of
a valid appropriation as specified in the Constitution.
Clearly, however, Proc. No. 131 is not an appropriation
measure even if it does provide for the creation of said
fund, for that is not its principal purpose. An appropriation
law is one the primary and specific purpose of which is to
authorize the release of public funds from the
treasury. 19 The creation of the fund is only incidental to
the main objective of the proclamation, which is agrarian
reform.

It should follow that the specific constitutional provisions

invoked, to wit, Section 24 and Section 25(4) of Article VI,
are not applicable. With particular reference to Section 24,
this obviously could not have been complied with for the
simple reason that the House of Representatives, which
now has the exclusive power to initiate appropriation
measures, had not yet been convened when the
proclamation was issued. The legislative power was then
solely vested in the President of the Philippines, who
embodied, as it were, both houses of Congress.

The argument of some of the petitioners that Proc. No.

131 and E.O. No. 229 should be invalidated because they
do not provide for retention limits as required by Article
XIII, Section 4 of the Constitution is no longer tenable.
R.A. No. 6657 does provide for such limits now in Section
6 of the law, which in fact is one of its most controversial
provisions. This section declares:

Retention Limits. — Except as otherwise provided in this

Act, no person may own or retain, directly or indirectly, any
public or private agricultural land, the size of which shall
vary according to factors governing a viable family-sized
farm, such as commodity produced, terrain, infrastructure,
and soil fertility as determined by the Presidential Agrarian
Reform Council (PARC) created hereunder, but in no case
shall retention by the landowner exceed five (5) hectares.
Three (3) hectares may be awarded to each child of the
landowner, subject to the following qualifications: (1) that
he is at least fifteen (15) years of age; and (2) that he is
actually tilling the land or directly managing the farm;
Provided, That landowners whose lands have been
covered by Presidential Decree No. 27 shall be allowed to
keep the area originally retained by them thereunder,
further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at
the time of the approval of this Act shall retain the same
areas as long as they continue to cultivate said
homestead.

The argument that E.O. No. 229 violates the constitutional

requirement that a bill shall have only one subject, to be
expressed in its title, deserves only short attention. It is
settled that the title of the bill does not have to be a
catalogue of its contents and will suffice if the matters
embodied in the text are relevant to each other and may
be inferred from the title. 20

The Court wryly observes that during the past dictatorship,

every presidential issuance, by whatever name it was
called, had the force and effect of law because it came
from President Marcos. Such are the ways of despots.
Hence, it is futile to argue, as the petitioners do in G.R.
No. 79744, that LOI 474 could not have repealed P.D. No.
27 because the former was only a letter of instruction. The
important thing is that it was issued by President Marcos,
whose word was law during that time.

But for all their peremptoriness, these issuances from the

President Marcos still had to comply with the requirement
for publication as this Court held in Tanada v.
Tuvera. 21 Hence, unless published in the Official Gazette
in accordance with Article 2 of the Civil Code, they could
not have any force and effect if they were among those
enactments successfully challenged in that case. LOI 474
was published, though, in the Official Gazette dated
November 29,1976.)

Finally, there is the contention of the public respondent in

G.R. No. 78742 that the writ of mandamus cannot issue to
compel the performance of a discretionary act, especially
by a specific department of the government. That is true
as a general proposition but is subject to one important
qualification. Correctly and categorically stated, the rule is
that mandamus will lie to compel the discharge of the
discretionary duty itself but not to control the discretion to
be exercised. In other words, mandamus can issue to
require action only but not specific action.

Whenever a duty is imposed upon a public official and an

unnecessary and unreasonable delay in the exercise of
such duty occurs, if it is a clear duty imposed by law, the
courts will intervene by the extraordinary legal remedy of
mandamus to compel action. If the duty is purely
ministerial, the courts will require specific action. If the
duty is purely discretionary, the courts by mandamus will
require action only. For example, if an inferior court, public
official, or board should, for an unreasonable length of
time, fail to decide a particular question to the great
detriment of all parties concerned, or a court should refuse
to take jurisdiction of a cause when the law clearly gave it
jurisdiction mandamus will issue, in the first case to
require a decision, and in the second to require that
jurisdiction be taken of the cause. 22

And while it is true that as a rule the writ will not be proper
as long as there is still a plain, speedy and adequate
remedy available from the administrative authorities, resort
to the courts may still be permitted if the issue raised is a
question of law. 23

III

There are traditional distinctions between the police power

and the power of eminent domain that logically preclude
the application of both powers at the same time on the
same subject. In the case of City of Baguio v.
NAWASA, 24for example, where a law required the transfer
of all municipal waterworks systems to the NAWASA in
exchange for its assets of equivalent value, the Court held
that the power being exercised was eminent domain
because the property involved was wholesome and
intended for a public use. Property condemned under the
police power is noxious or intended for a noxious purpose,
such as a building on the verge of collapse, which should
be demolished for the public safety, or obscene materials,
which should be destroyed in the interest of public morals.
The confiscation of such property is not compensable,
unlike the taking of property under the power of
expropriation, which requires the payment of just
compensation to the owner.

In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice

Holmes laid down the limits of the police power in a
famous aphorism: "The general rule at least is that while
property may be regulated to a certain extent, if regulation
goes too far it will be recognized as a taking." The
regulation that went "too far" was a law prohibiting mining
which might cause the subsidence of structures for human
habitation constructed on the land surface. This was
resisted by a coal company which had earlier granted a
deed to the land over its mine but reserved all mining
rights thereunder, with the grantee assuming all risks and
waiving any damage claim. The Court held the law could
not be sustained without compensating the grantor.
Justice Brandeis filed a lone dissent in which he argued
that there was a valid exercise of the police power. He
said:

Every restriction upon the use of property imposed in the

exercise of the police power deprives the owner of some
right theretofore enjoyed, and is, in that sense, an
abridgment by the State of rights in property without
making compensation. But restriction imposed to protect
the public health, safety or morals from dangers
threatened is not a taking. The restriction here in question
is merely the prohibition of a noxious use. The property so
restricted remains in the possession of its owner. The
state does not appropriate it or make any use of it. The
state merely prevents the owner from making a use which
interferes with paramount rights of the public. Whenever
the use prohibited ceases to be noxious — as it may
because of further changes in local or social conditions —
the restriction will have to be removed and the owner will
again be free to enjoy his property as heretofore.
Recent trends, however, would indicate not a polarization
but a mingling of the police power and the power of
eminent domain, with the latter being used as an
implement of the former like the power of taxation. The
employment of the taxing power to achieve a police
purpose has long been accepted. 26 As for the power of
expropriation, Prof. John J. Costonis of the University of
Illinois College of Law (referring to the earlier case of
Euclid v. Ambler Realty Co., 272 US 365, which sustained
a zoning law under the police power) makes the following
significant remarks:

Euclid, moreover, was decided in an era when judges

located the Police and eminent domain powers on
different planets. Generally speaking, they viewed eminent
domain as encompassing public acquisition of private
property for improvements that would be available for
public use," literally construed. To the police power, on the
other hand, they assigned the less intrusive task of
preventing harmful externalities a point reflected in the
Euclid opinion's reliance on an analogy to nuisance law to
bolster its support of zoning. So long as suppression of a
privately authored harm bore a plausible relation to some
legitimate "public purpose," the pertinent measure need
have afforded no compensation whatever. With the
progressive growth of government's involvement in land
use, the distance between the two powers has contracted
considerably. Today government often employs eminent
domain interchangeably with or as a useful complement to
the police power-- a trend expressly approved in the
Supreme Court's 1954 decision in Berman v. Parker,
which broadened the reach of eminent domain's "public
use" test to match that of the police power's standard of
"public purpose." 27

The Berman case sustained a redevelopment project and

the improvement of blighted areas in the District of
Columbia as a proper exercise of the police power. On the
role of eminent domain in the attainment of this purpose,
Justice Douglas declared:

If those who govern the District of Columbia decide that

the Nation's Capital should be beautiful as well as
sanitary, there is nothing in the Fifth Amendment that
stands in the way.

Once the object is within the authority of Congress, the

right to realize it through the exercise of eminent domain is
clear.

For the power of eminent domain is merely the means to

the end. 28

In Penn Central Transportation Co. v. New York

City, 29 decided by a 6-3 vote in 1978, the U.S Supreme
Court sustained the respondent's Landmarks Preservation
Law under which the owners of the Grand Central
Terminal had not been allowed to construct a multi-story
office building over the Terminal, which had been
designated a historic landmark. Preservation of the
landmark was held to be a valid objective of the police
power. The problem, however, was that the owners of the
Terminal would be deprived of the right to use the airspace
above it although other landowners in the area could do
so over their respective properties. While insisting that
there was here no taking, the Court nonetheless
recognized certain compensatory rights accruing to Grand
Central Terminal which it said would "undoubtedly
mitigate" the loss caused by the regulation. This "fair
compensation," as he called it, was explained by Prof.
Costonis in this wise:

In return for retaining the Terminal site in its pristine

landmark status, Penn Central was authorized to transfer
to neighboring properties the authorized but unused rights
accruing to the site prior to the Terminal's designation as a
landmark — the rights which would have been exhausted
by the 59-story building that the city refused to
countenance atop the Terminal. Prevailing bulk restrictions
on neighboring sites were proportionately relaxed,
theoretically enabling Penn Central to recoup its losses at
the Terminal site by constructing or selling to others the
right to construct larger, hence more profitable buildings
on the transferee sites. 30

The cases before us present no knotty complication

insofar as the question of compensable taking is
concerned. To the extent that the measures under
challenge merely prescribe retention limits for landowners,
there is an exercise of the police power for the regulation
of private property in accordance with the Constitution. But
where, to carry out such regulation, it becomes necessary
to deprive such owners of whatever lands they may own in
excess of the maximum area allowed, there is definitely a
taking under the power of eminent domain for which
payment of just compensation is imperative. The taking
contemplated is not a mere limitation of the use of the
land. What is required is the surrender of the title to and
the physical possession of the said excess and all
beneficial rights accruing to the owner in favor of the
farmer-beneficiary. This is definitely an exercise not of the
police power but of the power of eminent domain.

Whether as an exercise of the police power or of the

power of eminent domain, the several measures before us
are challenged as violative of the due process and equal
protection clauses.

The challenge to Proc. No. 131 and E.O. Nos. 228 and
299 on the ground that no retention limits are prescribed
has already been discussed and dismissed. It is noted that
although they excited many bitter exchanges during the
deliberation of the CARP Law in Congress, the retention
limits finally agreed upon are, curiously enough, not being
questioned in these petitions. We therefore do not discuss
them here. The Court will come to the other claimed
violations of due process in connection with our
examination of the adequacy of just compensation as
required under the power of expropriation.

The argument of the small farmers that they have been

denied equal protection because of the absence of
retention limits has also become academic under Section
6 of R.A. No. 6657. Significantly, they too have not
questioned the area of such limits. There is also the
complaint that they should not be made to share the
burden of agrarian reform, an objection also made by the
sugar planters on the ground that they belong to a
particular class with particular interests of their own.
However, no evidence has been submitted to the Court
that the requisites of a valid classification have been
violated.

Classification has been defined as the grouping of

persons or things similar to each other in certain
particulars and different from each other in these same
particulars. 31 To be valid, it must conform to the following
requirements: (1) it must be based on substantial
distinctions; (2) it must be germane to the purposes of the
law; (3) it must not be limited to existing conditions only;
and (4) it must apply equally to all the members of the
class. 32 The Court finds that all these requisites have
been met by the measures here challenged as arbitrary
and discriminatory.

Equal protection simply means that all persons or things

similarly situated must be treated alike both as to the
rights conferred and the liabilities imposed. 33 The
petitioners have not shown that they belong to a different
class and entitled to a different treatment. The argument
that not only landowners but also owners of other
properties must be made to share the burden of
implementing land reform must be rejected. There is a
substantial distinction between these two classes of
owners that is clearly visible except to those who will not
see. There is no need to elaborate on this matter. In any
event, the Congress is allowed a wide leeway in providing
for a valid classification. Its decision is accorded
recognition and respect by the courts of justice except
only where its discretion is abused to the detriment of the
Bill of Rights.

It is worth remarking at this juncture that a statute may be

sustained under the police power only if there is a
concurrence of the lawful subject and the lawful method.
Put otherwise, the interests of the public generally as
distinguished from those of a particular class require the
interference of the State and, no less important, the
means employed are reasonably necessary for the
attainment of the purpose sought to be achieved and not
unduly oppressive upon individuals. 34 As the subject and
purpose of agrarian reform have been laid down by the
Constitution itself, we may say that the first requirement
has been satisfied. What remains to be examined is the
validity of the method employed to achieve the
constitutional goal.

One of the basic principles of the democratic system is

that where the rights of the individual are concerned, the
end does not justify the means. It is not enough that there
be a valid objective; it is also necessary that the means
employed to pursue it be in keeping with the Constitution.
Mere expediency will not excuse constitutional shortcuts.
There is no question that not even the strongest moral
conviction or the most urgent public need, subject only to
a few notable exceptions, will excuse the bypassing of an
individual's rights. It is no exaggeration to say that a,
person invoking a right guaranteed under Article III of the
Constitution is a majority of one even as against the rest
of the nation who would deny him that right.
That right covers the person's life, his liberty and his
property under Section 1 of Article III of the Constitution.
With regard to his property, the owner enjoys the added
protection of Section 9, which reaffirms the familiar rule
that private property shall not be taken for public use
without just compensation.

This brings us now to the power of eminent domain.

IV

Eminent domain is an inherent power of the State that

enables it to forcibly acquire private lands intended for
public use upon payment of just compensation to the
owner. Obviously, there is no need to expropriate where
the owner is willing to sell under terms also acceptable to
the purchaser, in which case an ordinary deed of sale may
be agreed upon by the parties. 35 It is only where the
owner is unwilling to sell, or cannot accept the price or
other conditions offered by the vendee, that the power of
eminent domain will come into play to assert the
paramount authority of the State over the interests of the
property owner. Private rights must then yield to the
irresistible demands of the public interest on the time-
honored justification, as in the case of the police power,
that the welfare of the people is the supreme law.

But for all its primacy and urgency, the power of

expropriation is by no means absolute (as indeed no
power is absolute). The limitation is found in the
constitutional injunction that "private property shall not be
taken for public use without just compensation" and in the
abundant jurisprudence that has evolved from the
interpretation of this principle. Basically, the requirements
for a proper exercise of the power are: (1) public use and
(2) just compensation.

Let us dispose first of the argument raised by the

petitioners in G.R. No. 79310 that the State should first
distribute public agricultural lands in the pursuit of agrarian
reform instead of immediately disturbing property rights by
forcibly acquiring private agricultural lands. Parenthetically,
it is not correct to say that only public agricultural lands
may be covered by the CARP as the Constitution calls for
"the just distribution of all agricultural lands." In any event,
the decision to redistribute private agricultural lands in the
manner prescribed by the CARP was made by the
legislative and executive departments in the exercise of
their discretion. We are not justified in reviewing that
discretion in the absence of a clear showing that it has
been abused.

A becoming courtesy admonishes us to respect the

decisions of the political departments when they decide
what is known as the political question. As explained by
Chief Justice Concepcion in the case of Tañada v.
Cuenco: 36

The term "political question" connotes what it means in

ordinary parlance, namely, a question of policy. It refers to
"those questions which, under the Constitution, are to be
decided by the people in their sovereign capacity; or in
regard to which full discretionary authority has been
delegated to the legislative or executive branch of the
government." It is concerned with issues dependent upon
the wisdom, not legality, of a particular measure.

It is true that the concept of the political question has been

constricted with the enlargement of judicial power, which
now includes the authority of the courts "to determine
whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government." 37 Even
so, this should not be construed as a license for us to
reverse the other departments simply because their views
may not coincide with ours.
The legislature and the executive have been seen fit, in
their wisdom, to include in the CARP the redistribution of
private landholdings (even as the distribution of public
agricultural lands is first provided for, while also continuing
apace under the Public Land Act and other cognate laws).
The Court sees no justification to interpose its authority,
which we may assert only if we believe that the political
decision is not unwise, but illegal. We do not find it to be
so.

In U.S. v. Chandler-Dunbar Water Power Company,38 it

was held:

Congress having determined, as it did by the Act of March

3,1909 that the entire St. Mary's river between the
American bank and the international line, as well as all of
the upland north of the present ship canal, throughout its
entire length, was "necessary for the purpose of
navigation of said waters, and the waters connected
therewith," that determination is conclusive in
condemnation proceedings instituted by the United States
under that Act, and there is no room for judicial review of
the judgment of Congress ... .

As earlier observed, the requirement for public use has

already been settled for us by the Constitution itself No
less than the 1987 Charter calls for agrarian reform, which
is the reason why private agricultural lands are to be taken
from their owners, subject to the prescribed maximum
retention limits. The purposes specified in P.D. No. 27,
Proc. No. 131 and R.A. No. 6657 are only an elaboration
of the constitutional injunction that the State adopt the
necessary measures "to encourage and undertake the just
distribution of all agricultural lands to enable farmers who
are landless to own directly or collectively the lands they
till." That public use, as pronounced by the fundamental
law itself, must be binding on us.
The second requirement, i.e., the payment of just
compensation, needs a longer and more thoughtful
examination.

Just compensation is defined as the full and fair equivalent

of the property taken from its owner by the
expropriator. 39 It has been repeatedly stressed by this
Court that the measure is not the taker's gain but the
owner's loss. 40 The word "just" is used to intensify the
meaning of the word "compensation" to convey the idea
that the equivalent to be rendered for the property to be
taken shall be real, substantial, full, ample. 41

It bears repeating that the measures challenged in these

petitions contemplate more than a mere regulation of the
use of private lands under the police power. We deal here
with an actual taking of private agricultural lands that has
dispossessed the owners of their property and deprived
them of all its beneficial use and enjoyment, to entitle
them to the just compensation mandated by the
Constitution.

As held in Republic of the Philippines v. Castellvi, 42 there

is compensable taking when the following conditions
concur: (1) the expropriator must enter a private property;
(2) the entry must be for more than a momentary period;
(3) the entry must be under warrant or color of legal
authority; (4) the property must be devoted to public use or
otherwise informally appropriated or injuriously affected;
and (5) the utilization of the property for public use must
be in such a way as to oust the owner and deprive him of
beneficial enjoyment of the property. All these requisites
are envisioned in the measures before us.

Where the State itself is the expropriator, it is not

necessary for it to make a deposit upon its taking
possession of the condemned property, as "the
compensation is a public charge, the good faith of the
public is pledged for its payment, and all the resources of
taxation may be employed in raising the
43
amount." Nevertheless, Section 16(e) of the CARP Law
provides that:

Upon receipt by the landowner of the corresponding

payment or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank
designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the
proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines.
The DAR shall thereafter proceed with the redistribution of
the land to the qualified beneficiaries.

Objection is raised, however, to the manner of fixing the

just compensation, which it is claimed is entrusted to the
administrative authorities in violation of judicial
prerogatives. Specific reference is made to Section 16(d),
which provides that in case of the rejection or disregard by
the owner of the offer of the government to buy his land-

... the DAR shall conduct summary administrative

proceedings to determine the compensation for the land
by requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for
the land, within fifteen (15) days from the receipt of the
notice. After the expiration of the above period, the matter
is deemed submitted for decision. The DAR shall decide
the case within thirty (30) days after it is submitted for
decision.

To be sure, the determination of just compensation is a

function addressed to the courts of justice and may not be
usurped by any other branch or official of the
government. EPZA v. Dulay 44 resolved a challenge to
several decrees promulgated by President Marcos
providing that the just compensation for property under
expropriation should be either the assessment of the
property by the government or the sworn valuation thereof
by the owner, whichever was lower. In declaring these
decrees unconstitutional, the Court held through Mr.
Justice Hugo E. Gutierrez, Jr.:

The method of ascertaining just compensation under the

aforecited decrees constitutes impermissible
encroachment on judicial prerogatives. It tends to render
this Court inutile in a matter which under this Constitution
is reserved to it for final determination.

Thus, although in an expropriation proceeding the court

technically would still have the power to determine the just
compensation for the property, following the applicable
decrees, its task would be relegated to simply stating the
lower value of the property as declared either by the
owner or the assessor. As a necessary consequence, it
would be useless for the court to appoint commissioners
under Rule 67 of the Rules of Court. Moreover, the need
to satisfy the due process clause in the taking of private
property is seemingly fulfilled since it cannot be said that a
judicial proceeding was not had before the actual taking.
However, the strict application of the decrees during the
proceedings would be nothing short of a mere formality or
charade as the court has only to choose between the
valuation of the owner and that of the assessor, and its
choice is always limited to the lower of the two. The court
cannot exercise its discretion or independence in
determining what is just or fair. Even a grade school pupil
could substitute for the judge insofar as the determination
of constitutional just compensation is concerned.

xxx

In the present petition, we are once again confronted with

the same question of whether the courts under P.D. No.
1533, which contains the same provision on just
compensation as its predecessor decrees, still have the
power and authority to determine just compensation,
independent of what is stated by the decree and to this
effect, to appoint commissioners for such purpose.

This time, we answer in the affirmative.

xxx

It is violative of due process to deny the owner the

opportunity to prove that the valuation in the tax
documents is unfair or wrong. And it is repulsive to the
basic concepts of justice and fairness to allow the
haphazard work of a minor bureaucrat or clerk to
absolutely prevail over the judgment of a court
promulgated only after expert commissioners have
actually viewed the property, after evidence and
arguments pro and con have been presented, and after all
factors and considerations essential to a fair and just
determination have been judiciously evaluated.

A reading of the aforecited Section 16(d) will readily show

that it does not suffer from the arbitrariness that rendered
the challenged decrees constitutionally objectionable.
Although the proceedings are described as summary, the
landowner and other interested parties are nevertheless
allowed an opportunity to submit evidence on the real
value of the property. But more importantly, the
determination of the just compensation by the DAR is not
by any means final and conclusive upon the landowner or
any other interested party, for Section 16(f) clearly
provides:

Any party who disagrees with the decision may bring the
matter to the court of proper jurisdiction for final
determination of just compensation.
The determination made by the DAR is only preliminary
unless accepted by all parties concerned. Otherwise, the
courts of justice will still have the right to review with
finality the said determination in the exercise of what is
admittedly a judicial function.

The second and more serious objection to the provisions

on just compensation is not as easily resolved.

This refers to Section 18 of the CARP Law providing in full

as follows:

SEC. 18. Valuation and Mode of Compensation. — The

LBP shall compensate the landowner in such amount as
may be agreed upon by the landowner and the DAR and
the LBP, in accordance with the criteria provided for in
Sections 16 and 17, and other pertinent provisions hereof,
or as may be finally determined by the court, as the just
compensation for the land.

The compensation shall be paid in one of the following

modes, at the option of the landowner:

(1) Cash payment, under the following terms and

conditions:

(a) For lands above fifty (50) hectares, insofar as the

excess hectarage is concerned — Twenty-five percent
(25%) cash, the balance to be paid in government
financial instruments negotiable at any time.

(b) For lands above twenty-four (24) hectares and up to

fifty (50) hectares — Thirty percent (30%) cash, the
balance to be paid in government financial instruments
negotiable at any time.

(c) For lands twenty-four (24) hectares and below —

Thirty-five percent (35%) cash, the balance to be paid in
government financial instruments negotiable at any time.
(2) Shares of stock in government-owned or controlled
corporations, LBP preferred shares, physical assets or
other qualified investments in accordance with guidelines
set by the PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds, which shall have the following features:

(a) Market interest rates aligned with 91-day treasury bill

rates. Ten percent (10%) of the face value of the bonds
shall mature every year from the date of issuance until the
tenth (10th) year: Provided, That should the landowner
choose to forego the cash portion, whether in full or in
part, he shall be paid correspondingly in LBP bonds;

(b) Transferability and negotiability. Such LBP bonds may

be used by the landowner, his successors-in- interest or
his assigns, up to the amount of their face value, for any of
the following:

(i) Acquisition of land or other real properties of the

government, including assets under the Asset Privatization
Program and other assets foreclosed by government
financial institutions in the same province or region where
the lands for which the bonds were paid are situated;

(ii) Acquisition of shares of stock of government-owned or

controlled corporations or shares of stock owned by the
government in private corporations;

(iii) Substitution for surety or bail bonds for the provisional

release of accused persons, or for performance bonds;

(iv) Security for loans with any government financial

institution, provided the proceeds of the loans shall be
invested in an economic enterprise, preferably in a small
and medium- scale industry, in the same province or
region as the land for which the bonds are paid;
(v) Payment for various taxes and fees to government:
Provided, That the use of these bonds for these purposes
will be limited to a certain percentage of the outstanding
balance of the financial instruments; Provided, further,
That the PARC shall determine the percentages
mentioned above;

(vi) Payment for tuition fees of the immediate family of the

original bondholder in government universities, colleges,
trade schools, and other institutions;

(vii) Payment for fees of the immediate family of the

original bondholder in government hospitals; and

(viii) Such other uses as the PARC may from time to time
allow.

The contention of the petitioners in G.R. No. 79777 is that

the above provision is unconstitutional insofar as it
requires the owners of the expropriated properties to
accept just compensation therefor in less than money,
which is the only medium of payment allowed. In support
of this contention, they cite jurisprudence holding that:

The fundamental rule in expropriation matters is that the

owner of the property expropriated is entitled to a just
compensation, which should be neither more nor less,
whenever it is possible to make the assessment, than the
money equivalent of said property. Just compensation has
always been understood to be the just and complete
equivalent of the loss which the owner of the thing
expropriated has to suffer by reason of the
expropriation . 45 (Emphasis supplied.)
46
In J.M. Tuazon Co. v. Land Tenure Administration, this
Court held:

It is well-settled that just compensation means the

equivalent for the value of the property at the time of its
taking. Anything beyond that is more, and anything short
of that is less, than just compensation. It means a fair and
full equivalent for the loss sustained, which is the measure
of the indemnity, not whatever gain would accrue to the
expropriating entity. The market value of the land taken is
the just compensation to which the owner of condemned
property is entitled, the market value being that sum of
money which a person desirous, but not compelled to buy,
and an owner, willing, but not compelled to sell, would
agree on as a price to be given and received for such
property. (Emphasis supplied.)

In the United States, where much of our jurisprudence on

the subject has been derived, the weight of authority is
also to the effect that just compensation for property
expropriated is payable only in money and not otherwise.
Thus —

The medium of payment of compensation is ready money

or cash. The condemnor cannot compel the owner to
accept anything but money, nor can the owner compel or
require the condemnor to pay him on any other basis than
the value of the property in money at the time and in the
manner prescribed by the Constitution and the statutes.
When the power of eminent domain is resorted to, there
must be a standard medium of payment, binding upon
both parties, and the law has fixed that standard as money
in cash. 47 (Emphasis supplied.)

Part cash and deferred payments are not and cannot, in

the nature of things, be regarded as a reliable and
constant standard of compensation. 48

"Just compensation" for property taken by condemnation

means a fair equivalent in money, which must be paid at
least within a reasonable time after the taking, and it is not
within the power of the Legislature to substitute for such
payment future obligations, bonds, or other valuable
advantage. 49(Emphasis supplied.)

It cannot be denied from these cases that the traditional

medium for the payment of just compensation is money
and no other. And so, conformably, has just compensation
been paid in the past solely in that medium. However, we
do not deal here with the traditional excercise of the power
of eminent domain. This is not an ordinary expropriation
where only a specific property of relatively limited area is
sought to be taken by the State from its owner for a
specific and perhaps local purpose.

What we deal with here is a revolutionary kind of

expropriation.

The expropriation before us affects all private agricultural

lands whenever found and of whatever kind as long as
they are in excess of the maximum retention limits allowed
their owners. This kind of expropriation is intended for the
benefit not only of a particular community or of a small
segment of the population but of the entire Filipino nation,
from all levels of our society, from the impoverished farmer
to the land-glutted owner. Its purpose does not cover only
the whole territory of this country but goes beyond in time
to the foreseeable future, which it hopes to secure and
edify with the vision and the sacrifice of the present
generation of Filipinos. Generations yet to come are as
involved in this program as we are today, although
hopefully only as beneficiaries of a richer and more
fulfilling life we will guarantee to them tomorrow through
our thoughtfulness today. And, finally, let it not be forgotten
that it is no less than the Constitution itself that has
ordained this revolution in the farms, calling for "a just
distribution" among the farmers of lands that have
heretofore been the prison of their dreams but can now
become the key at least to their deliverance.
Such a program will involve not mere millions of pesos.
The cost will be tremendous. Considering the vast areas
of land subject to expropriation under the laws before us,
we estimate that hundreds of billions of pesos will be
needed, far more indeed than the amount of P50 billion
initially appropriated, which is already staggering as it is
by our present standards. Such amount is in fact not even
fully available at this time.

We assume that the framers of the Constitution were

aware of this difficulty when they called for agrarian reform
as a top priority project of the government. It is a part of
this assumption that when they envisioned the
expropriation that would be needed, they also intended
that the just compensation would have to be paid not in
the orthodox way but a less conventional if more practical
method. There can be no doubt that they were aware of
the financial limitations of the government and had no
illusions that there would be enough money to pay in cash
and in full for the lands they wanted to be distributed
among the farmers. We may therefore assume that their
intention was to allow such manner of payment as is now
provided for by the CARP Law, particularly the payment of
the balance (if the owner cannot be paid fully with money),
or indeed of the entire amount of the just compensation,
with other things of value. We may also suppose that what
they had in mind was a similar scheme of payment as that
prescribed in P.D. No. 27, which was the law in force at
the time they deliberated on the new Charter and with
which they presumably agreed in principle.

The Court has not found in the records of the

Constitutional Commission any categorical agreement
among the members regarding the meaning to be given
the concept of just compensation as applied to the
comprehensive agrarian reform program being
contemplated. There was the suggestion to "fine tune" the
requirement to suit the demands of the project even as it
was also felt that they should "leave it to Congress" to
determine how payment should be made to the landowner
and reimbursement required from the farmer-beneficiaries.
Such innovations as "progressive compensation" and
"State-subsidized compensation" were also proposed. In
the end, however, no special definition of the just
compensation for the lands to be expropriated was
reached by the Commission. 50

On the other hand, there is nothing in the records either

that militates against the assumptions we are making of
the general sentiments and intention of the members on
the content and manner of the payment to be made to the
landowner in the light of the magnitude of the expenditure
and the limitations of the expropriator.

With these assumptions, the Court hereby declares that

the content and manner of the just compensation provided
for in the afore- quoted Section 18 of the CARP Law is not
violative of the Constitution. We do not mind admitting that
a certain degree of pragmatism has influenced our
decision on this issue, but after all this Court is not a
cloistered institution removed from the realities and
demands of society or oblivious to the need for its
enhancement. The Court is as acutely anxious as the rest
of our people to see the goal of agrarian reform achieved
at last after the frustrations and deprivations of our
peasant masses during all these disappointing decades.
We are aware that invalidation of the said section will
result in the nullification of the entire program, killing the
farmer's hopes even as they approach realization and
resurrecting the spectre of discontent and dissent in the
restless countryside. That is not in our view the intention of
the Constitution, and that is not what we shall decree
today.

Accepting the theory that payment of the just

compensation is not always required to be made fully in
money, we find further that the proportion of cash payment
to the other things of value constituting the total payment,
as determined on the basis of the areas of the lands
expropriated, is not unduly oppressive upon the
landowner. It is noted that the smaller the land, the bigger
the payment in money, primarily because the small
landowner will be needing it more than the big
landowners, who can afford a bigger balance in bonds and
other things of value. No less importantly, the government
financial instruments making up the balance of the
payment are "negotiable at any time." The other modes,
which are likewise available to the landowner at his option,
are also not unreasonable because payment is made in
shares of stock, LBP bonds, other properties or assets, tax
credits, and other things of value equivalent to the amount
of just compensation.

Admittedly, the compensation contemplated in the law will

cause the landowners, big and small, not a little
inconvenience. As already remarked, this cannot be
avoided. Nevertheless, it is devoutly hoped that these
countrymen of ours, conscious as we know they are of the
need for their forebearance and even sacrifice, will not
begrudge us their indispensable share in the attainment of
the ideal of agrarian reform. Otherwise, our pursuit of this
elusive goal will be like the quest for the Holy Grail.

The complaint against the effects of non-registration of the

land under E.O. No. 229 does not seem to be viable any
more as it appears that Section 4 of the said Order has
been superseded by Section 14 of the CARP Law. This
repeats the requisites of registration as embodied in the
earlier measure but does not provide, as the latter did, that
in case of failure or refusal to register the land, the
valuation thereof shall be that given by the provincial or
city assessor for tax purposes. On the contrary, the CARP
Law says that the just compensation shall be ascertained
on the basis of the factors mentioned in its Section 17 and
in the manner provided for in Section 16.

The last major challenge to CARP is that the landowner is

divested of his property even before actual payment to
him in full of just compensation, in contravention of a well-
accepted principle of eminent domain.

The recognized rule, indeed, is that title to the property

expropriated shall pass from the owner to the expropriator
only upon full payment of the just compensation.
Jurisprudence on this settled principle is consistent both
here and in other democratic jurisdictions. Thus:

Title to property which is the subject of condemnation

proceedings does not vest the condemnor until the
judgment fixing just compensation is entered and paid, but
the condemnor's title relates back to the date on which the
petition under the Eminent Domain Act, or the
commissioner's report under the Local Improvement Act,
is filed. 51

... although the right to appropriate and use land taken for
a canal is complete at the time of entry, title to the property
taken remains in the owner until payment is actually
made. 52 (Emphasis supplied.)

In Kennedy v. Indianapolis, 53 the US Supreme Court cited

several cases holding that title to property does not pass
to the condemnor until just compensation had actually
been made. In fact, the decisions appear to be uniformly
to this effect. As early as 1838, in Rubottom v. McLure, 54 it
was held that "actual payment to the owner of the
condemned property was a condition precedent to the
investment of the title to the property in the State" albeit
"not to the appropriation of it to public use." In Rexford v.
Knight, 55 the Court of Appeals of New York said that the
construction upon the statutes was that the fee did not
vest in the State until the payment of the compensation
although the authority to enter upon and appropriate the
land was complete prior to the payment. Kennedy further
said that "both on principle and authority the rule is ... that
the right to enter on and use the property is complete, as
soon as the property is actually appropriated under the
authority of law for a public use, but that the title does not
pass from the owner without his consent, until just
compensation has been made to him."

Our own Supreme Court has held in Visayan Refining Co.

v. Camus and Paredes, 56 that:

If the laws which we have exhibited or cited in the

preceding discussion are attentively examined it will be
apparent that the method of expropriation adopted in this
jurisdiction is such as to afford absolute reassurance
that no piece of land can be finally and irrevocably taken
from an unwilling owner until compensation is
paid ... . (Emphasis supplied.)

It is true that P.D. No. 27 expressly ordered the

emancipation of tenant-farmer as October 21, 1972 and
declared that he shall "be deemed the owner" of a portion
of land consisting of a family-sized farm except that "no
title to the land owned by him was to be actually issued to
him unless and until he had become a full-fledged
member of a duly recognized farmers' cooperative." It was
understood, however, that full payment of the just
compensation also had to be made first, conformably to
the constitutional requirement.

When E.O. No. 228, categorically stated in its Section 1

that:

All qualified farmer-beneficiaries are now deemed full

owners as of October 21, 1972 of the land they acquired
by virtue of Presidential Decree No. 27. (Emphasis
supplied.)
it was obviously referring to lands already validly acquired
under the said decree, after proof of full-fledged
membership in the farmers' cooperatives and full payment
of just compensation. Hence, it was also perfectly proper
for the Order to also provide in its Section 2 that the "lease
rentals paid to the landowner by the farmer- beneficiary
after October 21, 1972 (pending transfer of ownership
after full payment of just compensation), shall be
considered as advance payment for the land."

The CARP Law, for its part, conditions the transfer of

possession and ownership of the land to the government
on receipt by the landowner of the corresponding payment
or the deposit by the DAR of the compensation in cash or
LBP bonds with an accessible bank. Until then, title also
remains with the landowner. 57 No outright change of
ownership is contemplated either.

Hence, the argument that the assailed measures violate

due process by arbitrarily transferring title before the land
is fully paid for must also be rejected.

It is worth stressing at this point that all rights acquired by

the tenant-farmer under P.D. No. 27, as recognized under
E.O. No. 228, are retained by him even now under R.A.
No. 6657. This should counter-balance the express
provision in Section 6 of the said law that "the landowners
whose lands have been covered by Presidential Decree
No. 27 shall be allowed to keep the area originally
retained by them thereunder, further, That original
homestead grantees or direct compulsory heirs who still
own the original homestead at the time of the approval of
this Act shall retain the same areas as long as they
continue to cultivate said homestead."

In connection with these retained rights, it does not appear

in G.R. No. 78742 that the appeal filed by the petitioners
with the Office of the President has already been resolved.
Although we have said that the doctrine of exhaustion of
administrative remedies need not preclude immediate
resort to judicial action, there are factual issues that have
yet to be examined on the administrative level, especially
the claim that the petitioners are not covered by LOI 474
because they do not own other agricultural lands than the
subjects of their petition.

Obviously, the Court cannot resolve these issues. In any

event, assuming that the petitioners have not yet
exercised their retention rights, if any, under P.D. No. 27,
the Court holds that they are entitled to the new retention
rights provided for by R.A. No. 6657, which in fact are on
the whole more liberal than those granted by the decree.

The CARP Law and the other enactments also involved in

these cases have been the subject of bitter attack from
those who point to the shortcomings of these measures
and ask that they be scrapped entirely. To be sure, these
enactments are less than perfect; indeed, they should be
continuously re-examined and rehoned, that they may be
sharper instruments for the better protection of the
farmer's rights. But we have to start somewhere. In the
pursuit of agrarian reform, we do not tread on familiar
ground but grope on terrain fraught with pitfalls and
expected difficulties. This is inevitable. The CARP Law is
not a tried and tested project. On the contrary, to use
Justice Holmes's words, "it is an experiment, as all life is
an experiment," and so we learn as we venture forward,
and, if necessary, by our own mistakes. We cannot expect
perfection although we should strive for it by all means.
Meantime, we struggle as best we can in freeing the
farmer from the iron shackles that have unconscionably,
and for so long, fettered his soul to the soil.
By the decision we reach today, all major legal obstacles
to the comprehensive agrarian reform program are
removed, to clear the way for the true freedom of the
farmer. We may now glimpse the day he will be released
not only from want but also from the exploitation and
disdain of the past and from his own feelings of
inadequacy and helplessness. At last his servitude will be
ended forever. At last the farm on which he toils will be his
farm. It will be his portion of the Mother Earth that will give
him not only the staff of life but also the joy of living. And
where once it bred for him only deep despair, now can he
see in it the fruition of his hopes for a more fulfilling future.
Now at last can he banish from his small plot of earth his
insecurities and dark resentments and "rebuild in it the
music and the dream."

WHEREFORE, the Court holds as follows:

1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O.
Nos. 228 and 229 are SUSTAINED against all the
constitutional objections raised in the herein petitions.

2. Title to all expropriated properties shall be transferred to

the State only upon full payment of compensation to their
respective owners.

3. All rights previously acquired by the tenant- farmers

under P.D. No. 27 are retained and recognized.

4. Landowners who were unable to exercise their rights of

retention under P.D. No. 27 shall enjoy the retention rights
granted by R.A. No. 6657 under the conditions therein
prescribed.

5. Subject to the above-mentioned rulings all the petitions

are DISMISSED, without pronouncement as to costs.

SO ORDERED.
Fernan, (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr.,
Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento,
Cortes, Griño-Aquino, Medialdea and Regalado, JJ.,
concur.